Gold prices dropped slightly on Friday, but still remained above $US1,300 per ounce as investors digested news of US President Donald Trump saying a meeting with North Korea’s leader could still go ahead.
Spot gold lost 0.1 per cent at $US1,303.34 per ounce, yet was on track for a weekly gain of 0.9 per cent, its biggest since March. Spot gold earlier hit a 10-day high at $US1,307.80.
US gold futures for June delivery settled down 70 cents, or 0.1 per cent, at US1,303.70 per ounce.
‘Gold has managed to hold onto a significant chunk of its gains made yesterday despite the US trading conciliatory messages with North Korea again, something which has boosted the global stock markets and the US dollar,’ said Forex.com analyst Fawad Razaqzada.
Julius Baer analyst Carsten Menke said the uncertainty over the US-North Korea meeting was likely to have only a temporary impact on gold, traditionally used as a safe place to park assets in times of instability.
‘Based on this pattern and on gold’s very tight relationship with the US dollar, this uplift in price should be temporary and we should fall back below $US1,300 an ounce,’ he said.
US dollar-priced gold tends to increase when the greenback weakens because this makes it cheaper for buyers with other currencies.
The dollar reached a new 2018 high, helped by North Korea saying it was open to resolving issues with the United States.
On Thursday, gold rallied above $US1,300 an ounce after Trump said the meeting with North Korea was off.
Global shares also steadied, reducing the clamour for gold as a safer asset.
Heading into a long holiday weekend in the United States, Dillon Gage’s Walter Pehowich said trading activity was virtually mute.
‘I expect gold to stay between $US1,300 and $US1,308 for the weekend.’
Investors focused on the psychologically important $US1,300 level, MKS trader Samuel Laughlin said, ‘as a pivot point for near-term price action.’
Gold had been trading in a range between about $US1,310 and $US1,360 since hitting a one-and-a-half year high in January but was pushed lower this month by a trengthening dollar and rising US bond yields, which reduce the appeal of non-yielding gold.
Meanwhile, silver lost 0.6 per cent at $US16.53 per ounce, headed for a weekly gain of 0.4 per cent. It earlier hit $US16.70, a one-and-a-half-week high.